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U.K. House Price Growth Slows to Five-Year Low, Nationwide Says

(Bloomberg) -- U.K. house prices posted their slowest annual growth in five years, according to Nationwide Building Society.

Growth slowed to just 0.5 percent in 2018, down from 2.6 percent a year earlier, the firm said in a report Friday. That was the slowest 12-month pace since February 2013. On the month, home values fell 0.7 percent.

The property market is moderating after decades of steep price gains made homes less affordable. The uncertainty of Brexit is also denting demand and clouding the economic outlook. Last month, consumer confidence weakened and surveyors reported a further fall in new buyer inquiries, Nationwide said.

London, which has been hit especially hard, saw home values decline 0.8 percent during 2018. The capital has recorded an annual price decline for six quarters in a row, Nationwide said.

“The recent slowdown is attributable to the impact of the uncertain economic outlook on buyer sentiment, given that it has occurred against a backdrop of solid employment growth, stronger wage growth and continued low borrowing costs,” said Robert Gardner, Nationwide’s chief economist.

House prices could rise at a low, single-digit pace in 2019 if the economy continues to grow “at a modest pace,” Gardner said.